Hi,
I have managed to find a resolution to this problem so I thought I would post it here in case any one else has the same issue.

On the Adobe web site there is an uninstaller for the flash player here
http://kb.adobe.com/selfservice/viewContent.do?externalId=tn_14157&sliceId=1

Once I had uninstalled the flash player & rebooted my PC then the normal flash player install described above worked ok (as before) but this time when it had finished Potlatch worked too.

Thanks for reading.